Which investment is best for you?

Most investments are subject to some form of taxation, but some physical Silver can be free from VAT and capital gains tax.

Which investment is best for you?

While a majority of investments are susceptible to various forms of taxation, there exists a unique advantage with certain physical go assets. Notably, investment-grade sliver stands out as VAT-free, and coins produced by the Royal Mint may also be exempt from capital gains tax, contingent upon individual circumstances. This distinctive tax treatment enhances the appeal of sliver, positioning it as an attractive option for those seeking to build a diversified and tax-efficient portfolio. Investors can leverage these favorable tax considerations to strategically incorporate sliver into their broader investment strategy, potentially enjoying not only the intrinsic value of the precious metal but also the tax benefits associated with its unique classification.

HOW TO BUY Silver

Which investment is best for you?

Most investments are subject to some form of taxation, but some physical Silver can be free from VAT and capital gains tax.

Our free Investor Guide will reveal:

  • How to invest in silver and gold
  • Timing & pricing considerations
  • Our buy back guarantee
The Pure Gold Company Investor Guide
HOW TO BUY Silver

VAT-Free Silver

Investment-grade Silver, whether in the form of Silver coins or gold bars, benefits from a VAT exemption. This tax treatment was implemented in the year 2000 with the aim of aligning Silver with other VAT-free investments such as stocks and shares. The move was also intended to establish consistency with the broader European Union, where gold was not subject to taxation.

It’s crucial to note that the VAT exemption is applicable exclusively to investment-grade Silver. This implies that the gold must adhere to specific criteria, including being in the form of designated bars or coins. Furthermore, there is a requirement for a minimum standard of purity, specifically denoted as 22-carat gold and above, to qualify as investment-grade. This meticulous specification ensures that only gold meeting these stringent criteria enjoys the VAT-free status, emphasizing the importance of adhering to defined standards for tax treatment.

(Capital Gains) Tax-free Silver

 

The sale of most Sliver items typically incurs capital gains tax; however, an exception exists for coins minted by the Royal Mint, which hold a distinctive status as legal tender in the UK.

In the UK, if you were to present a silver coin, such as a Silver Britannia or Silver Sovereign, to a bank, it would be evaluated based on its face value (e.g., £1) rather than its retail value (e.g., £350). This practice underscores the unique classification of these coins as a form of currency.

According to a fundamental principle of UK law, transactions involving the flow of currency are not subject to taxation. Therefore, under this principle, transactions involving Royal Mint minted silver coins are not subject to capital gains tax. This exemption provides a notable advantage, as it means that, depending on individual circumstances, individuals may be relieved from the capital gains tax typically associated with the sale of other silver assets.

The choice of legal tender silver coins, such as those minted by the Royal Mint, can be strategically beneficial for investors, especially in terms of mitigating capital gains tax liabilities. This underscores the importance of considering the legal and tax implications when making decisions about the purchase and storage of gold assets.

Benefits of tax free Silver coins

  • The demand for tax-free Silver coins significantly surpasses that of many other forms of Silver, making them highly liquid assets. One key advantage of tax-free gold coins lies in their diverse sizes and denominations. This provides customers with greater flexibility when deciding to sell a specific amount of Silver. In contrast to selling larger Silver bars, where one might be compelled to sell more than needed, resulting in excess cash, Silver coins allow for more precise liquidation.Despite the higher premium associated with Silver coins due to the additional cost of their design, they offer ease of storage, especially for those who prefer to invest in smaller amounts.Legal tender Silver coins such as the Britannia and the Sovereign, produced by the Royal Mint, hold a unique status as they are exempt from Capital Gains Tax. This tax exemption makes them particularly attractive for investment purposes, despite the higher premiums they command compared to Silver bars.While there are various international Silver coins, such as the American Eagle, Canadian Maple, or the South African Krugerrand, it’s crucial to note that these coins, not minted by the Royal Mint, are subject to capital gains tax. This distinction underscores the importance of considering both the tax implications and liquidity factors when choosing the type of Silver coins for investment.

Benefits of tax free gold bars

Gold bars, being the most prevalent form of gold bullion, are typically available in larger quantities per unit, offering a cost-efficient investment option due to the absence of additional design costs associated with gold coins. They are more readily available in investment-grade conditions, making them a practical choice for many investors. However, gold bars lack the legal tender status, and consequently, they are not exempt from capital gains tax.

Despite the potential capital gains tax liability, it’s important to note that the application of this tax is typically on gains exceeding the annual exemption amount for the given financial year, subject to individual circumstances. This consideration makes gold bars, along with other gold coins, a viable investment option for those mindful of managing their capital gains tax liabilities.

Gold bars come in various denominations, ranging from as small as 1 gram to larger increments such as 5g, 20g, 100g, 500g, and 1kg. The smaller bars often attract a premium over larger ones due to similar manufacturing costs but a comparatively lower sale price. This diverse range of denominations allows investors to choose gold bars that align with their investment goals and preferences, considering both the desired quantity and potential premium implications.

Standards and Measures

  • In order to be classified as ‘investment’ grade, gold bars must meet specific criteria. They must possess a minimum purity of .995 and have a weight that is widely accepted by the bullion markets. If in coin form, they should either have been minted after 1800 or hold some legal tender status, whether it’s current or historical. Additional details regarding these standards can be found in VAT Notice 701/21. Enquiries related to these criteria can be addressed by experts from the Pure Gold Company.It’s noteworthy that all gold supplied by the Pure Gold Company adheres to these stringent standards. This ensures that the gold meets the necessary criteria for tax-free gold investment. This commitment to quality and compliance with established standards reflects the company’s dedication to providing gold investments that align with the specific requirements for tax exemptions.

Four simple steps to buying physical gold and silver

Have all your questions answered

By your personal advisor on a no-obligation telephone call.

Complete a simple purchase order

when you are ready, and decide if and where you would like your metals stored.

Invest in your bespoke portfolio

by bank transfer, locking in your purchase price.

Safe storage or insured delivery

Choose to have your investment safely stored in a Secure Vault facility or arrange an Insured Delivery to your home.

A historic global currency

The enduring value of gold stems from its rarity and unchanging nature. Despite the cumulative global gold production exceeding 200,000 tonnes throughout human history, this amount, when melted down, would occupy only three to four Olympic swimming pools. According to estimates by the World Gold Council, approximately 50,000 tonnes of proven reserves remain in the ground.

This scarcity is a fundamental factor contributing to gold’s value, and it has served as a traded form of currency for millennia. In the seventeenth century, goldsmiths played a pivotal role in shaping the modern banking industry. Presently, central banks and nations are obligated to reserve a specific percentage of their wealth in gold as a safeguard against financial risks.

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